+

Cookies on the Business Insider India website

Business Insider India has updated its Privacy and Cookie policy. We use cookies to ensure that we give you the better experience on our website. If you continue without changing your settings, we\'ll assume that you are happy to receive all cookies on the Business Insider India website. However, you can change your cookie setting at any time by clicking on our Cookie Policy at any time. You can also see our Privacy Policy.

Close
HomeQuizzoneWhatsappShare Flash Reads
 

A new startup thinks it can stop Wall Street cheaters by monitoring how much traders laugh

May 21, 2015, 19:42 IST

A big thing for bank compliance is to figure out how to stop rogue traders from doing bad things, preferably before they get caught by a regulator.

Advertisement

There's a new startup that's trying to do that with technology. It's called Behavox.

It was started by former Goldman Sachs analyst Erkin Adylov. The idea seems to be to quantify every action and relationship of every trader, then monitor the data for subtle changes.

Here's how the system works, according to Euromoney:

It uses 50 different metrics to gauge closeness and 50 to gauge importance of contacts for voice and the same again for email and chat. The key is to monitor deviations from the average way in which a trader communicates with all counterparties and changes to the way a trader communicates with particular counterparts.

Advertisement

So all interactions will be monitored, and anything outside the norm will be suspicious, it seems. Here's more about the thinking:

"We're looking for changes in behaviour and anomalies in how people communicate," Adylov tells Euromoney. "So for example, an important thing to notice may be how often a trader laughs on the phone. Our system establishes a true picture of the relationship between a trader and his or her counterparts. So, if a trader laughs more often in conversation with a person, uses more slang in emails to them or swears more, that is a good indication of how close they are. As well as being a designated counterparty, that person - maybe working at another firm - is clearly the trader's mate. The trader may also be good mates with his risk manager. Does that represent a conflict of interest to bear in mind?"

The moral here is don't laugh to hard on your next client call. Your compliance department might get suspicious.

NOW WATCH: 6 shortcuts in Excel that will save you a ton of time

Please enable Javascript to watch this video
You are subscribed to notifications!
Looks like you've blocked notifications!
Next Article